Question

TRUE OR FALSE

1. Es= % Change Qd/ % Change P

2. SOLE PROPRIETORSHIPS REPRESENTS THE MOST COMPANIES AND SALES IN THE US.

3. GLOBALIZATION, GLOCALIZATION , AND INTERNATIONAL TRADE ALL HAVE THE IDENTICAL

STRATEGIES OF INCREASING TRADE AND BUSINESS TO IMPROVE NATIONS’ ECONOMIES.

4. GATT AND THE WTO HAVE THE SAME FUNCTIONS BUT WTO CAME BEFORE GATT.

5. TRADE SURPLUS = EXPORTS > IMPORTS; MORE DOMESTIC JOBS; AND LOWER CONSUMER

PRICES; AND THIS IS GOOD FOR THE US ECONOMY.

6. GENERALLY THE HIGHER THE UNEMPLOYMENT RATE, THE HIGHER THE INFLATION RATE.

7. Ed > 1 Product is Inelastic.

8. STRUCTURAL UNEMPLOYMENT IS BETTER AND EASIER TO FIX COMPARED TO FRICTION

UNEMPLOYMENT.

9. ABSOLUTE ADVANTAGE IS WHEN A COMPETITOR CAN MAKE A PRODUCT WITH MORE

RESOURCES AND SLIGHTLY LOWER COSTS.

10. COMPARATIVE ADVANTAGE IS WHEN A COMPETITOR CAN MAKE A PRODUCT WITH

LOWER OPPORTUNITY COSTS; THEREFORE MAKES THE PRODUCT CHEAPER AND EASIER.

11. SUSTAINED COMPETITIVE ADVANTAGE IS LONG TERM, AND COMPETITIVE ADVANTAGE IS

SHORT TERM. BOTH ARE VERY IMPORTANT FOR COMPETITORS TO HAVE IN THE

MARKETPLACE .

12. AUTARKY, CLOSED SYSTEM, AND PROTECTIONISM ARE THE SAME. THEY MEAN NO

BUSINESS WITH OTHER COUNTRIES

13. ASSET INTEREST RATES ARE GENERALLY MUCH LOWER COMPARED TO DEBT INTEREST

RATES.

14. COMPARATIVE ADVANTAGE COMES FROM NATIONS’ CLIMATE, LABOR, TECHNOLOGY,

AND AVAILABIITY OF ENTPRENEURSHIP AND CAPITAL.

15. CAPITAL IN ECONOMICS MEANS SOME MONEY, EQUIPMENT,COMPUTERS, AND

BUILDINGS THAT HELP US PRODUCE OTHER PRODUCTS.

16. Ed OF INCOME= % CHANGE Qd/ % CHANGE I. THE HIGHER THE INCOME THE HIGHER Qd

FOR NORMAL PRODUCTS.

17. STOCKS GENERALLY ARE MORE RISKY THAN BONDS. BONDS ARE DEBT INVESTMENTS.

18. REAL INTEREST RATE < NOMINAL INTEREST RATE.

19. ACCOUNTING PROFIT= NET INCOME= REVENUES- EXPENSES – TAXES

20. ECONOMIC PROFIT= NET INCOME= REVENUES – EXPLICIT COSTS – IMPLICIT COSTS.

21. POSITIVE CASH FLOW = INFLOW < OUTFLOW.

22. FIRMS RAISE MONEY BY USE OF STOCKS, BONDS, AND DIVIDENDS.

23. OWNERS EQUITY= REVENUE – DIVIDENDS + EXPENSES – OWNERS PAID IN CAP.

24. RISKS ARE INDIRECTLY RELATED TO REWARDS.

25. MOODY’S, S & P, FITCH, AND SC JOHNSON ARE RATINGS AGENCIES FOR BOND

INVESTMENTS.

Answer 1

ANSWER

(1) FALSE

Es= % change in Qs/ % change in Price

(2) TRUE

Sole proprietorships are the simplest and most common form of small business ownership, representing 73% of all businesses in the United States today.

(3) TRUE

As in every system, the country takes into consideration the global trade for increasing the profits and trade with other countries.

(4) FALSE

The GATT rules applied to trade in goods. The WTO covers not just goods, but also trade in services and trade-related aspects of intellectual property rights.

ALSO, GATT was founded earlier.